The UK economy could be heading for recession over the next two years, according to a downbeat report.

The Deloitte Economic Review warned that the economy was likely to experience its weakest period of growth in 15 years, with the credit crunch making it more difficult to secure borrowing.

The report also warned that the housing market was likely to fall by around 5% this year and 8% in 2009.

"The global financial crisis and the associated credit crunch have brought an end to the period of easy credit that in recent years has been the bedrock of rapid rises in house prices," said Roger Bootle, Deloitte's economic adviser.

The consultancy also predicted that interest rates would fall to 4% by 2009.